sikiliza (< 20)

My Biggest Investing Regret

March 29, 2012 – Comments (2) | RELATED TICKERS: NUS , AVP

Peter Lynch in his seminal book, One up on Wall Street harps on the need to invest in stocks that you are already familiar with; stocks representing companies whose products you use on a regular basis. He also alludes to discovering Hanes’ L’Eggs brand through his wife, who happened to love the stockings that the company sold.

Well, for me, the one that got away was Nu Skin Enterprises (NUS), a multi-level seller of beauty products much like Avon Products. Back in 2008 I was dating a wonderful girl whose sister ran a Beauty Salon and also sold beauty products. One day she mentioned that I should look into Nu Skin. It seemed that customers were lining up for their products and they were flying off the shelf. Her sister, she told me, had decided to go one better and buy some shares given how well the products were doing.

You probably guessed it by now; I blew it off as a fad and anyway, what did a pair of sisters running beauty businesses know about investing in stocks? Quite bit it turns out. Since then, NUS has risen from $9.30 a share to the current $56.45 while at the same instituting a dividend. Meanwhile, the queen of multi-level marketing, Avon Products has continued to implode as a result of Andrea Jung’s less than stellar leadership. Who knew?

These days I listen, investigate, and give more benefit of the doubt to people.